Want to know what is Fifth Third Bank‘s next move in customer acquisition and retention?

So would Fifth Third.

The super-regional bank, whose territory includes nearly every swing state in tomorrow’s election, has all the tricks of the banking innovation trade: RDC, mobile, geo-location apps. Fifth Third is also reaching out via focus groups, email surveys, and Skype chats to see what their customers’ needs and wants are. So when Bank Innovation asked last week what’s next, the answer was, we don’t know.

And we sense that Fifth Third, which has around 1,300 branches, is not alone here. The fact is that innovative banking tools are proliferating so fast and so ubiquitously, mainly because of the concentration of industry IT vendors, that to pinpoint what’s next is becoming exceedingly difficult. It is as if we have moved into a post-innovation phase, when everything innovative becomes anything but in a compressed timeframe.

Fifth Third and other banks have also hit this wall because some of the out-of-the-box innovations will required shared information between financial institutions and more sophisticated analytics. Banks want to share information about as much as Smokey the Bear wants a cigar.

The other factor to note is that mobile banking continues to grow at such a rapid clip that banks don’t need to reinvent it. The mobile user base at Fifth Third, for example, has grown 10x over the last year, the bank reports. With that kind of growth, who needs to know what’s next?

No. I am suggesting that there is ubiquity in the tools available to banks and, by extension, to consumers, and that is leading to great parity among banks. Banks install a fixed population of tools, and they are “done” in the sense that they have what “every” bank has. As a result, the need to reinvent banking has dissipated, in my view — which is too bad.

Interesting to note the potentially blinkered focus on “innovation” having to be technology or channel based.

Sadly, banks continue to focus too much on these questions that, as the article itself says, can be replicated too easily by others and become a commodity in a matter of days, removing any differentiation capability or sensation of added value.

Banks often appear to lose sight of the need to innovate in the product space also, offer clients solutions – not just products – and improve internal efficiency and operation flows. A poor product offering with great channel delivery does not impress customers long term.